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How much will feds help finance Minnesota’s shift to clean energy?

Once you get into the trillions, you’re starting to talk about some serious money.

O.K., that’s a variation on an old joke, but the price tag on the 2021 Infrastructure Investment and Jobs Act sports an eye-popping outlay of $1.2 trillion for projects around the country, including $107.5 billion in the area of energy, power and electric grid reliability.

Meanwhile, 2022’s Inflation Reduction Act includes $391 billion in spending on energy and climate change, including electric grid reliability.

On Tuesday, the House Climate and Energy Finance and Policy Committee heard about how much might be coming the state’s way through the acts.

Jon Kelly, director of government affairs for the Commerce Department, presented details about projects related to the committee’s purview that have been submitted for federal approval and others that are in development.

According to the League of Minnesota Cities, IIJA programs are expected to bring $7.4 billion to the state over the next five years, while the IRA will provide access to a portion of $225 million in grants to help state and local governments adopt the latest building energy codes.

Most of the money comes with strings attached, in that, for 84% of the IIJA grants, states must come up with matching funds that range between 5% and 50% of a project’s cost. But the IRA also includes a combination of rebates and tax credits to facilitate the transition to clean energy.

One of the IRA’s objectives is to invest in climate change mitigation, with $369 billion set aside for that purpose. The funding is intended for projects that help the U.S. reach a goal of reducing greenhouse gas emissions by 40% by 2030.

Kelly said the federal Energy Department has awarded the state $2 million to make 85 weather-assistance-eligible households electrification ready, and $626,000 for a weather resistive advanced prefab pilot initiative. The state is also seeking $6 million for high-performance window replacements and $405,628 for energy efficiency for manufactured homes.

As for money made available by the IIJA and IRA, Kelly said the state plans to apply for grants for a portion of these available funds:

  • $8 billion for a multi-state “hydrogen hub” system;
  • $1.1 billion for a multi-state program to improve bulk transmission interconnection-queue backlogs;
  • $670 million to meet zero-energy building code provisions;
  • $400 million for transmission upgrades and grid-enhancing technology for cooperative and municipal utilities;
  • $330 million to assist in meeting energy conservation building codes;
  • $76.2 million for weatherization assistance programs;
  • $30 million for grid resilience;
  • $7.7 million to help fund a state energy program;
  • $7.2 million in energy efficiency and conservation block grants; and
  • $1.9 million for an energy efficiency revolving loan fund.

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